Equities
Stock and bond markets across the globe staged a relief rally as easing Middle East tensions sent oil prices sliding and soothed inflation worries ahead of a packed week of central bank meetings and earnings reports.
Wall Street futures pointed higher, with Dow futures up 1.1 per cent, S&P 500 futures up 0.85 per cent and Nasdaq futures up 1.36 per cent as of 8:38 a.m. ET. TSX futures were up 0.7 per cent after Canada’s main stock index notched a small gain on Friday.
In Canada, investors are getting results from Celestica Inc., First Capital Realty Inc., Gibson Energy Inc. and Topaz Energy Corp.
On Wall Street, markets are watching earnings from AstraZeneca PLC, Nucor Corp., TFI International Inc. and Welltower Inc.
Traders slightly pared back the probability of rate hikes from the Federal Reserve this week. The U.S. central bank’s next rate decision is due on Wednesday, and markets imply around a one-in-three chance of a rate rise, though most analysts doubt Chair Kevin Warsh would be in favour of such a move.
“Since the last FOMC meeting, inflation, labour market and consumption data have all been sufficiently comfortable to prevent the need for aggressive hiking. What was also a source of comfort was that the oil price was closer to $70 than $100,” said Samy Chaar, chief economist at Lombard Odier.
Overseas, the pan-European STOXX 600 was up 0.76 per cent in morning trading. Britain’s FTSE 100 rose 0.41 per cent, Germany’s DAX gained 1.54 per cent and France’s CAC 40 advanced 0.86 per cent.
In Asia, Japan’s Nikkei closed 0.50 per cent higher, while Hong Kong’s Hang Seng jumped 0.98 per cent.
Commodities
Oil prices tumbled, hitting a one-week low, after the U.S. and Iran paused strikes over the weekend. The move raised hopes of a diplomatic solution that would de-escalate the conflict and allow shipping to resume in the Strait of Hormuz
Brent crude futures fell about 7.8 per cent to US$89.23 a barrel. U.S. West Texas Intermediate crude was down about 6.73 per cent at US$83.30 a barrel.
“The market seems to be forever seeking good news from an arena that really is not providing any,” said PVM analyst John Evans. “A stay of military strikes might seem an improvement, but it does not come with any guarantees that oil will soon flow from the area ... prices will only continue lower if high prices once again dent demand, not questionable mini-ceasefires.”
In other commodities, spot gold gained 1 per cent to US$4,093.34 an ounce, while U.S gold futures for August delivery rose 0.6 per cent to US$4,095.60.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 70.86 US cents to 71.07 US cents in early trading. The Canadian dollar was up about 0.76 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, fell 0.20 per cent to 101.155. The dollar was pegged at $1.4102.
The euro rose 0.20 per cent to US$1.1394. The British pound gained 0.07 per cent to US$1.3314.
In bonds, the yield on the U.S. 10-year note was last down at 4.640 per cent.
Economic news
8:30 a.m. ET: U.S. durable goods orders for June
10:30 a.m. ET: Bank of Canada market participants survey for the second quarter
With Reuters and The Canadian Press